The greedy rich have spent a trillion or two over the past 50 years to convince us that MMT is not true. They had too because it is true by definition. A financially sovereign government creates its own money.
Also, LLM AI is being force fed to us by greedy rich advertising. LLM AI will never be profitable in the standard business sense. Bernie and many others have been bamboozled and that can't end well if it persists.
And the sovereign-wealth-fund idea never addresses the other major problem with "AI" - the ecological damage caused by data centers' relentless demands for fresh water and energy.
Regardless of whether "AI" attains any trustable level of accuracy in its results; regardless of what profits are generated and by whom they're received: ETHICAL USE OF "AI" IS NOT POSSIBLE until and unless its environmental impact is mitigated.
The "everyone is an investor" lure is not new. Back in the 80's, here in the UK, Thatcher was hugely successful in creating "mini-capitalists", by: selling off the nations housing stock, at a knockdown price; and encouraging share ownership, by selling off national assets, (rail, water, energy, etc.), on the cheap. Fifty years later, we have a huge housing shortage, and privatised industries, failing to provide a basic level of service - and in danger of going bankrupt. Yes, a generation of "mini-capitalists" was created - but subsequent generations have been left high and dry.
And, I fear, Bernie is, regularly, now pitching his tent in no-man's land. For instance, he recently suggested: taxing the rich and handing out cheques to the poor, to cover their healthcare costs. Um, no! Tax the rich, and create a National Health Service - free, at the point of delivery, to everyone.
I fail to see how current investment in LLM AI software suites based on unregulated brute force computing and plagiarism scraping of IP can survive in the face of more nimble and efficient offshore competition, antagonistic domestic and foreign opposition, plus the appearance of a hyped financial bubble apparently aproaching bursting point.
The illionares have begun to demand returns on their AI investments. The supply of free AI compute tokens to business and corporate accounts is ceasing. They won't be burning through 500,000 tokens per month each now that the free-to-play is becoming a pay-per-use model.
I totally agree with you. But getting the left to truly regulate anything anymore feels like getting a chicken to produce milk. Except for a precious few, they have been SO complacent all through this nightmare we are all living, I just can't see them having the cojones to try to regulate AI. I hope I'm wrong.
These companies aren’t making money and taking a public stake in them is a losing proposition. The reason Altman is pushing this narrative, is to bury $ 1 TRILLION of investor money that’s been BURNED & socialize further losses.
These companies want to go public b/c they have no path to profitability. We’ve gone from token-maxing, to our annual budget has been blown in a couples of month (!).
A basic, minimum ROI is not there, let alone any true accounting for the social and economic costs. Just another glaring example of how piss-poor most leaders’ thinking is, left or right.
Thank GOD we’re waking up. At least now we’re recognizing what a mess we’re in. In any treatment of addictive behaviour, that’s half the battle.
Modern Monetary Theory (MMT), quoting Stephanie Kelton to argue that because the US government issues its own currency, it doesn't need a "hoard of points" to cut checks to citizens. Congress can just vote to allocate money or implement a standard corporate tax.
This relies on a dangerous, naive trust in the permanence of government bureaucracy. Yes, the Federal Reserve can print fiat currency. But what the government gives, the government can instantly take away. A state-administered handout funded by fluctuating income taxes or standard budget lines is permanently vulnerable to the next hostile Congressional majority or right-wing austerity drive. Look at what happened to the expanded Child Tax Credits in the US; wiped out with the stroke of a legislative pen.
Furthermore, simply printing flat currency does absolutely nothing to fix the structural distortion of Asset Ownership. If tech monopolies own 100% of the automated infrastructure, they hold the monopoly power over pricing, supply chains, and computational access. Pumping printed fiat currency into a society where a handful of Silicon Valley cartels control all the productive assets just creates a hyper-inflationary loop where printed dollars flow directly back into corporate hands.
We don't want a government check. We want a statutory Machine Royalty locked into an independent asset engine that cannot be raided or repealed by future administrations.
Objection 2: "The Dangerous Investor Mentality"
You argue that putting corporate stock into a wealth fund turns citizens into investors. If your monthly payout relies on OpenAI or Anthropic’s stock price, you will naturally overlook the social damages of AI; like job destruction and algorithmic bias; in the name of maximizing corporate profits. You are describing the flaws of standard, passive Wall Street portfolios. you seem to be picturing a union pension fund that silently holds index stock while corporate boardrooms crush workers.
The model we are going after; a Global Labor Trust (GLT); is explicitly built to be an offensive, activist vehicle of economic democracy.
When the GLT captures a statutory royalty on automated gross output, it doesn't just sit back and watch a stock ticker go up. It uses that capital block to accumulate massive, dominant equity positions with direct voting blocks and board seats inside those very technology conglomerates. The same way Blackrock bought their way in.
Traditional Investor vs. Activist Labor Trust
We aren't turning workers into passive capitalists; we are using the capital matrix to seize control of the steering wheel. A worker-governed board seat doesn't vote to automate a trucking fleet into the garbage to juice quarterly earnings. A worker-governed board seat votes to deploy automation to shorten the workweek, mandate profit-sharing, and fund civilizational masterworks.
Current investors only value profit. True labor trustees value the preservation and dignity of human life. The GLT weaponizes capital to force corporate infrastructure to serve humanity, turning a corporate public relations coup into a corporate surrender.
The Missing Variable: Reclaiming Our Social Heritage
You concludes that we should simply "regulate and tax the AI companies." This is the ultimate regulatory illusion. You cannot regulate a monopoly that is moving at a 18-month sprint while your legislative process moves at a generational crawl. By the time a tech regulation is debated, drafted, and tied up in federal court appeals, the industry has mutated three times over and automated another ten million jobs.
More importantly, traditional taxation treats corporate automation as a completely private innovation that the state is merely penalizing. This concedes the moral high ground to Silicon Valley.
AI models possess no innate capability. They are an enclosure of our collective Social Heritage. They only exist because they ingested the books, data, magazines, and historical telemetry generated by generations of working class families. They are running on energy grids and physical infrastructure that our grandparents built and our parents maintained.
We aren't looking to "tax" them as an afterthought. We are reclaiming a Sovereign Property Right over the data and infrastructure they enclosed.
The Global Labor Trust is not a state capital hoard or a passive retirement portfolio. It is an industrial fortress designed to transition humanity from a post-wage crisis into a post-work renaissance; funding the Financial Independent Floor and localized sandboxes like Transition Cities to heal our purpose deficit.
You want to use the hammer of 20th-century regulation to crack a 21st-century cybernetic monopoly. It’s time to drop the old playbook and step up the field of capital sovereignty.
There are a couple of problems with your thesis. First, you suggest that when we need money to fund things, the best thing to do is print more. There’s no consideration of the other side of the balance sheet, the growing deficit. Interest payments on the deficit have already exceeded the cost of Social Security. Deficits sacrifice tax dollars to pay investors who profit by lending us the money we print. Second, you seem to discount the power that 50% ownership of AI companies gives to the shareholders. Owners can regulate from the inside while legislators regulate from the outside. Third, the foundational argument you make is that we don’t want American citizens to adopt an “investor mindset.” So much water has gone under that bridge already that it’s difficult to know where to begin. AI is here, and it’s going to make trillions of dollars for its owners. Bernie’s proposal acknowledges that undisputed fact, and makes American citizens owners who both benefit from those profits and could use their ownership to leverage behavior change. In the meantime, we should, as you said, tax and regulate the bejesus out of them. I believe Altman’s interest is due to the fact that the proposal is powerful and seductive and he wants to control its impact, were it to come to fruition. The biggest danger in Bernie’s proposal is that it’s aimed directly at billionaire control and windfall profits they will, if allowed to do so, keep for themselves.
Look I don't want to rehash the entire MMT debate in a comment section but I encourage you to read more about the approach because you are caricaturing it inaccurately. They are very conscious of the dangers of money printing and view inflation as a constraint.
Also, the government does not need to be a shareholder in order to influence the behavior of companies. It can make laws and levy taxes, unlike you and me.
I don’t want to rehash the debate here, either. Part of me is very sympathetic and would love to see it adopted. Here is how Stephanie Kelton (I assume you know her writing) says MMT addresses inflation: “Of course, there are real limits to what can be done. No country can commit to large-scale infrastructure investment unless it has the available labor, machinery, concrete and, steel. Trying to spend too much will cause an inflation problem. The trick is to adjust the budget to make efficient use of the people, factories and raw materials we have.” That “trick” means - in a Democracy divided ideologically and politically - politicians (and I have been one) would need to cut spending and raise taxes to address deficit-caused inflation. It’s not clear to me how MMT would address that pragmatic challenge. Bernie’s proposal is a real-world intervention designed to address the political challenges of the moment. In this political moment, MMT seems more pie-in-the-sky theology than economics.
The essence of your arguments are so fundamentally sound that I find it difficult to tolerate the many details each of these commentators hold up as valid counter arguments. Perhaps it’s because I’m used to your rhetorical passions. I value the force of your rhetoric, in fact. The truth is certainly that a sovereign wealth fund is brain dead stupid. Full stop. There are things I like about socialism, but government ownership of industry is most definitely not one of them. My experiences with Italian telephone monopolies in the 80s taught me that.
Taxing the automated output for a Sovereign wealth fund, doesn't mean invest the money in AI. We would need a democratically elected Fund management body. I say vote every 6 months.
I fail to see how current investment in LLM AI software suites based on unregulated brute force computing and plagiarism scraping of IP can survive in the face of more nimble and efficient offshore competition, antagonistic domestic and foreign opposition, plus the appearance of a hyped financial bubble apparently aproaching bursting point.
One important concern you didn't mention is that if we take ownership in half the (potential) assets of a company, we are also taking ownership in half the (potential) debts. And I'm sure AI companies stocks have gotten a boost just from talk of a sovereign wealth fund-I'm also certain Trump has taken advantage of this.
I have a fundamental question that I don't see clearly answered anywhere about this. Is Bernie proposing we BUY half the equity in these companies, or that we effectively NATIONALIZE half the equity? I've seen people assume the former, but the latter is a more palatable idea (though I also oppose it).
The greedy rich have spent a trillion or two over the past 50 years to convince us that MMT is not true. They had too because it is true by definition. A financially sovereign government creates its own money.
Also, LLM AI is being force fed to us by greedy rich advertising. LLM AI will never be profitable in the standard business sense. Bernie and many others have been bamboozled and that can't end well if it persists.
And the sovereign-wealth-fund idea never addresses the other major problem with "AI" - the ecological damage caused by data centers' relentless demands for fresh water and energy.
Regardless of whether "AI" attains any trustable level of accuracy in its results; regardless of what profits are generated and by whom they're received: ETHICAL USE OF "AI" IS NOT POSSIBLE until and unless its environmental impact is mitigated.
https://www.theatlantic.com/ideas/2026/06/ai-data-center-electricity-water/687521/
Just in case you didn’t see this. I certainly don’t know what’s what, but it doesn’t seem as cut and dried as your perspective to me.
The "everyone is an investor" lure is not new. Back in the 80's, here in the UK, Thatcher was hugely successful in creating "mini-capitalists", by: selling off the nations housing stock, at a knockdown price; and encouraging share ownership, by selling off national assets, (rail, water, energy, etc.), on the cheap. Fifty years later, we have a huge housing shortage, and privatised industries, failing to provide a basic level of service - and in danger of going bankrupt. Yes, a generation of "mini-capitalists" was created - but subsequent generations have been left high and dry.
And, I fear, Bernie is, regularly, now pitching his tent in no-man's land. For instance, he recently suggested: taxing the rich and handing out cheques to the poor, to cover their healthcare costs. Um, no! Tax the rich, and create a National Health Service - free, at the point of delivery, to everyone.
I fail to see how current investment in LLM AI software suites based on unregulated brute force computing and plagiarism scraping of IP can survive in the face of more nimble and efficient offshore competition, antagonistic domestic and foreign opposition, plus the appearance of a hyped financial bubble apparently aproaching bursting point.
If they are firing millions of people...And they have stopped hiring college grads...The Ai is paid for.
The illionares have begun to demand returns on their AI investments. The supply of free AI compute tokens to business and corporate accounts is ceasing. They won't be burning through 500,000 tokens per month each now that the free-to-play is becoming a pay-per-use model.
I totally agree with you. But getting the left to truly regulate anything anymore feels like getting a chicken to produce milk. Except for a precious few, they have been SO complacent all through this nightmare we are all living, I just can't see them having the cojones to try to regulate AI. I hope I'm wrong.
Bernie's losing his fastball, man. At some point, he's gotta pass the torch and put himself out to pasture.
“Money is just an accounting tool” is MMT nonsense.
Or, like, an obvious fact.
Obviously wrong statement
These companies aren’t making money and taking a public stake in them is a losing proposition. The reason Altman is pushing this narrative, is to bury $ 1 TRILLION of investor money that’s been BURNED & socialize further losses.
These companies want to go public b/c they have no path to profitability. We’ve gone from token-maxing, to our annual budget has been blown in a couples of month (!).
A basic, minimum ROI is not there, let alone any true accounting for the social and economic costs. Just another glaring example of how piss-poor most leaders’ thinking is, left or right.
Thank GOD we’re waking up. At least now we’re recognizing what a mess we’re in. In any treatment of addictive behaviour, that’s half the battle.
Modern Monetary Theory (MMT), quoting Stephanie Kelton to argue that because the US government issues its own currency, it doesn't need a "hoard of points" to cut checks to citizens. Congress can just vote to allocate money or implement a standard corporate tax.
This relies on a dangerous, naive trust in the permanence of government bureaucracy. Yes, the Federal Reserve can print fiat currency. But what the government gives, the government can instantly take away. A state-administered handout funded by fluctuating income taxes or standard budget lines is permanently vulnerable to the next hostile Congressional majority or right-wing austerity drive. Look at what happened to the expanded Child Tax Credits in the US; wiped out with the stroke of a legislative pen.
Furthermore, simply printing flat currency does absolutely nothing to fix the structural distortion of Asset Ownership. If tech monopolies own 100% of the automated infrastructure, they hold the monopoly power over pricing, supply chains, and computational access. Pumping printed fiat currency into a society where a handful of Silicon Valley cartels control all the productive assets just creates a hyper-inflationary loop where printed dollars flow directly back into corporate hands.
We don't want a government check. We want a statutory Machine Royalty locked into an independent asset engine that cannot be raided or repealed by future administrations.
Objection 2: "The Dangerous Investor Mentality"
You argue that putting corporate stock into a wealth fund turns citizens into investors. If your monthly payout relies on OpenAI or Anthropic’s stock price, you will naturally overlook the social damages of AI; like job destruction and algorithmic bias; in the name of maximizing corporate profits. You are describing the flaws of standard, passive Wall Street portfolios. you seem to be picturing a union pension fund that silently holds index stock while corporate boardrooms crush workers.
The model we are going after; a Global Labor Trust (GLT); is explicitly built to be an offensive, activist vehicle of economic democracy.
When the GLT captures a statutory royalty on automated gross output, it doesn't just sit back and watch a stock ticker go up. It uses that capital block to accumulate massive, dominant equity positions with direct voting blocks and board seats inside those very technology conglomerates. The same way Blackrock bought their way in.
Traditional Investor vs. Activist Labor Trust
We aren't turning workers into passive capitalists; we are using the capital matrix to seize control of the steering wheel. A worker-governed board seat doesn't vote to automate a trucking fleet into the garbage to juice quarterly earnings. A worker-governed board seat votes to deploy automation to shorten the workweek, mandate profit-sharing, and fund civilizational masterworks.
Current investors only value profit. True labor trustees value the preservation and dignity of human life. The GLT weaponizes capital to force corporate infrastructure to serve humanity, turning a corporate public relations coup into a corporate surrender.
The Missing Variable: Reclaiming Our Social Heritage
You concludes that we should simply "regulate and tax the AI companies." This is the ultimate regulatory illusion. You cannot regulate a monopoly that is moving at a 18-month sprint while your legislative process moves at a generational crawl. By the time a tech regulation is debated, drafted, and tied up in federal court appeals, the industry has mutated three times over and automated another ten million jobs.
More importantly, traditional taxation treats corporate automation as a completely private innovation that the state is merely penalizing. This concedes the moral high ground to Silicon Valley.
AI models possess no innate capability. They are an enclosure of our collective Social Heritage. They only exist because they ingested the books, data, magazines, and historical telemetry generated by generations of working class families. They are running on energy grids and physical infrastructure that our grandparents built and our parents maintained.
We aren't looking to "tax" them as an afterthought. We are reclaiming a Sovereign Property Right over the data and infrastructure they enclosed.
The Global Labor Trust is not a state capital hoard or a passive retirement portfolio. It is an industrial fortress designed to transition humanity from a post-wage crisis into a post-work renaissance; funding the Financial Independent Floor and localized sandboxes like Transition Cities to heal our purpose deficit.
You want to use the hammer of 20th-century regulation to crack a 21st-century cybernetic monopoly. It’s time to drop the old playbook and step up the field of capital sovereignty.
There are a couple of problems with your thesis. First, you suggest that when we need money to fund things, the best thing to do is print more. There’s no consideration of the other side of the balance sheet, the growing deficit. Interest payments on the deficit have already exceeded the cost of Social Security. Deficits sacrifice tax dollars to pay investors who profit by lending us the money we print. Second, you seem to discount the power that 50% ownership of AI companies gives to the shareholders. Owners can regulate from the inside while legislators regulate from the outside. Third, the foundational argument you make is that we don’t want American citizens to adopt an “investor mindset.” So much water has gone under that bridge already that it’s difficult to know where to begin. AI is here, and it’s going to make trillions of dollars for its owners. Bernie’s proposal acknowledges that undisputed fact, and makes American citizens owners who both benefit from those profits and could use their ownership to leverage behavior change. In the meantime, we should, as you said, tax and regulate the bejesus out of them. I believe Altman’s interest is due to the fact that the proposal is powerful and seductive and he wants to control its impact, were it to come to fruition. The biggest danger in Bernie’s proposal is that it’s aimed directly at billionaire control and windfall profits they will, if allowed to do so, keep for themselves.
Look I don't want to rehash the entire MMT debate in a comment section but I encourage you to read more about the approach because you are caricaturing it inaccurately. They are very conscious of the dangers of money printing and view inflation as a constraint.
Also, the government does not need to be a shareholder in order to influence the behavior of companies. It can make laws and levy taxes, unlike you and me.
I don’t want to rehash the debate here, either. Part of me is very sympathetic and would love to see it adopted. Here is how Stephanie Kelton (I assume you know her writing) says MMT addresses inflation: “Of course, there are real limits to what can be done. No country can commit to large-scale infrastructure investment unless it has the available labor, machinery, concrete and, steel. Trying to spend too much will cause an inflation problem. The trick is to adjust the budget to make efficient use of the people, factories and raw materials we have.” That “trick” means - in a Democracy divided ideologically and politically - politicians (and I have been one) would need to cut spending and raise taxes to address deficit-caused inflation. It’s not clear to me how MMT would address that pragmatic challenge. Bernie’s proposal is a real-world intervention designed to address the political challenges of the moment. In this political moment, MMT seems more pie-in-the-sky theology than economics.
Doug Henwood is good on this: https://jacobin.com/2019/02/modern-monetary-theory-isnt-helping
Thank you. Henwood makes a lot of sense to me.
Superb piece! Might see you at the party!
The essence of your arguments are so fundamentally sound that I find it difficult to tolerate the many details each of these commentators hold up as valid counter arguments. Perhaps it’s because I’m used to your rhetorical passions. I value the force of your rhetoric, in fact. The truth is certainly that a sovereign wealth fund is brain dead stupid. Full stop. There are things I like about socialism, but government ownership of industry is most definitely not one of them. My experiences with Italian telephone monopolies in the 80s taught me that.
Taxing the automated output for a Sovereign wealth fund, doesn't mean invest the money in AI. We would need a democratically elected Fund management body. I say vote every 6 months.
I fail to see how current investment in LLM AI software suites based on unregulated brute force computing and plagiarism scraping of IP can survive in the face of more nimble and efficient offshore competition, antagonistic domestic and foreign opposition, plus the appearance of a hyped financial bubble apparently aproaching bursting point.
Great article as usual.
One important concern you didn't mention is that if we take ownership in half the (potential) assets of a company, we are also taking ownership in half the (potential) debts. And I'm sure AI companies stocks have gotten a boost just from talk of a sovereign wealth fund-I'm also certain Trump has taken advantage of this.
I have a fundamental question that I don't see clearly answered anywhere about this. Is Bernie proposing we BUY half the equity in these companies, or that we effectively NATIONALIZE half the equity? I've seen people assume the former, but the latter is a more palatable idea (though I also oppose it).
Nationalize. Which is certainly better than buy, but still leaves the issues discussed above.